Background
Express Jewelry Enterprises, Inc. suffered damage to its Dearborn, Michigan store after a storm dumped seven and a half inches of rain, overwhelming the city sewer system and causing a backup that flooded the basement. The insurer denied the claim based on a flood exclusion. The insured also claimed damage to the ground floor, first attributing it to water rising from the basement and later to wind damage, but the insurer found the evidence for wind damage to be fabricated or taken after the event.
The court’s reasoning
The court reviewed the summary judgment de novo, applying Michigan law to interpret the insurance contract. The court determined the policy language was unambiguous. Regarding the basement, the court found the sewer backup was a direct result of the inundation of normally dry land areas, which defined a flood under the policy, thus triggering the exclusion. Regarding the ground floor, the court found the insured failed to meet its burden of proof. The metadata analysis proved the photos and video offered as evidence of wind damage were created in December, six months after the June storm, rendering the insured’s testimony self-serving and insufficient to create a genuine dispute of material fact.
What it means going forward
The decision reinforces that insurance policies with flood exclusions will be enforced to deny coverage for sewer backups caused by excessive rainfall, even if the immediate mechanism is a backup. It also highlights that summary judgment will be granted against insured parties who cannot provide contemporaneous, reliable evidence to support claims of covered perils like wind damage.
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